By Aya Takada
Nov. 2 (Bloomberg) -- Rubber slumped by the most in seven weeks as a drop in U.S. consumer spending and the bankruptcy of CIT Group Inc. stoked concern that an economic recovery may falter, curbing demand for the commodity used in tires.
Futures in Tokyo settled down 3 percent, the largest daily loss since Sept. 14. New-York based CIT Group, a 101-year-old commercial lender, filed for bankruptcy on Nov. 1 after a U.S. bailout and debt exchange offer failed. Americans cut spending 0.5 percent in September, the first decline in five months, the Commerce Department reported Oct. 30.
“Investors reduced holdings of equities and commodities as they question a rosy scenario that global economic growth may accelerate,” Kazuhiko Saito, chief analyst at commodity broker Fujitomi Co. in Tokyo, said today by phone. “Rubber was sold together with oil and other industrial commodities.”
April-delivery rubber fell as much as 4.5 percent to 220.8 yen a kilogram ($2,453 a metric ton) on the Tokyo Commodity Exchange before settling at 224.3 yen, the lowest closing price since Oct. 19. The price gained 18 percent in October, the largest monthly gain since July.
Futures trimmed losses after data showed Japan’s auto sales grew 13 percent in October from a year earlier, the third straight month of expansion.
Sales of cars, trucks and buses, excluding minicars, rose to 263,506 vehicles in October, the Japan Automobile Dealers Association said in a statement today. Toyota Motor Corp. and Honda Motor Co., Japan’s two biggest automakers, led the growth.
Auto Sales
Auto sales in Japan reversed a yearlong slide in August as government rebates and tax cuts for fuel-efficient vehicles helped lift demand for Toyota’s Prius and Honda’s Insight hybrid cars. Honda almost tripled its full-year profit estimate last week and raised its forecast for domestic vehicle sales to 665,000 from 635,000, citing the stimulus effect.
“Japanese car sales were positive, but auto data from the U.S. tomorrow may not be as good as Japan,” Saito said. U.S. auto sales plunged 23 percent in September, and the seasonally adjusted annual sales rate fell to 9.22 million units, according to industry researcher Autodata Corp. Sales slumped after a government purchasing incentive program ended in August.
Asian stocks dropped, tracking a 2.8 percent decline in the Standard & Poor’s 500 Index Oct. 30. CIT, which filed the fifth- largest bankruptcy by assets, said it plans to exit quickly due to support from bondholders, who voted in favor of a so-called prepackaged plan. CIT listed $71 billion in assets and $64.9 billion in debt in a Chapter 11 filing in U.S. Bankruptcy Court in Manhattan.
January-delivery rubber on the Shanghai Futures Exchange slipped 2 percent to close at 18,960 yuan ($2,777) a ton. Prices fell after the Shanghai exchange reported Oct. 30 that natural rubber stockpiles monitored by the bourse increased 6,230 tons to 116,913 tons, the highest level since November 2004.
To contact the reporters on this story: Aya Takada in Tokyo atakada2@bloomberg.net
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